India is a nation of ironies. On one hand the government claims India had record food grain production this year; godowns are bursting with food grains. A picture of contrast to this is the fact that 42 percent of our little children are malnourished. Can we join the dots by drawing a straight line from the warehouse to the homes of the hungry?
Subsidies on food and agriculture have shot up and bumper crops have been harvested, but instead of bringing down food prices, it seems to have had the opposite effect. Farmers are being paid more than double what they were 10 years ago for their food grain and retail prices of food have gone up - but they are still committing suicide.
We congratulate ourselves on record food grain exports at a time when per capita food availability in the domestic market is declining. Exporters make profits, but the exchequer loses.
Into this crazy picture, the UPA government promulgated the National Food security Ordinance, which was passed by Lok Sabha on 27 August 2013. No one knows what impact it will have - economic, political, and social- but it appears set to become law nonetheless. Will it fix the problem or cripple the economy?
Major highlights of the Bill
- The proposed bill guarantees two-third population the right to 5 kg of food grains every month at highly subsidised rates of Rs 1-3 per kg.
- Under the bill, every person belonging to 'eligible households' will be entitled to receive 5 Kg of food grains per person per month at subsidised rates from state governments under the targeted Public Distribution System (PDS).
- With this, India will join select league of countries in the world that guarantee majority of its population food grains.
- At Rs 125,000 crore of government support, the food security programme will be the largest in the world.
- The bill will guarantee 5 kg of rice, wheat and coarse cereals per month per person at a fixed price of Rs 3, 2, 1, respectively.
- However, about 2.43 crore poorest of the poor families covered under the Antyodaya Anna Yojana (AAY) scheme under PDS (Public Distribution System) would get entitlement to 35 kg of food grains per family per month.
- The bill will provide more power to women as it will entitle the eldest woman (above 18 years) of the household to be head of the household for the purpose of issue of ration cards.
- Under the proposed bill, every pregnant woman and lactating mother will be entitled to free of charge meal, during pregnancy and six months after the child birth.
- The bill also guarantees free and appropriate meal to every child up to the age of 6 years, through local anganwadi so as to meet the nutritional standards. The children within the age group of 6-14 will be entitled to free mid-day meal everyday, government and government aided schools.
THE FOUR YEAR JOURNEY
- June 2009: President Pratibha Patil, during her speech in Parliament, announces the UPA-II government would bring the Food Security Bill within 100 days.
- July 2011: Union cabinet prepares draft bill
- December 2011: The cabinet-approved bill tabled in the Lok Sabha
- November 2012: Bill rejected by the parliamentary standing committee
- March 2013: Modified draft bill approved by the cabinet
- May 2013: Due to disruptions in the proceedings, the Food Security Bill could not be tabled in Parliament during the Budget Session.
- August 26, 2013: Bill passed by the Lok Sabha during the Monsoon session; to be debated in the Rajya Sabha
- This bill is being brought to enable food guarantee to two-thirds of the population
- The amount of money spent on this would be twice the amount the central government spends on fertilisers and 35% more than the amount spent on giving subdisies on oil.
Economics of the Bill
Policymakers clearly have little idea how much implementing the Right to Food will cost. In the current year, Finance minister P Chidambaram has allocated only Rs 90,000 crore towards the food subsidy, of which Rs. 10,000 crore is the additional amount for implementing the Food security Bill. The food ministry estimates that the subsidy bill in the current year is likely to cross Rs 1.3 lakh crore.
And even this is inadequate, according to a paper by the Commission on Agricultural Costs and Prices, which puts the cost at Rs 2.41 lakh crore in the first year of implementation. Over three years, it says, the outlay will be Rs 6.82 lakh crore, including the Rs 1.1 lakh crore required for upscaling food production.
Whatever the figure, the fact is that every year, the minimum support price (MSP) will go up and impact the food subsidy bill. Since 2003-04, MSPs of wheat and rice have more than doubled, from Rs 640 to Rs 1,350 per quintal in the case of wheat, and from Rs 550 to Rs 1,250 for paddy. But the food subsidy bill has gone up more three times in the same period, from Rs 25,181 crore to Rs 85,000 crore. This is because handling and storage costs have gone up as well.
We will be open to constructive suggestions, we will learn from experience, but we must put aside our differences. – Sonia Gandhi, Congress Chairperson
What will those not covered by Food Security Bill eat? Spectrum? Coal? – Murli Manohar Joshi, veteran BJP leader
Why didn’t you bring this Bill earlier when poor people were dying of hunger? Is this for elections or for the hungry? – Mulayam Singh Yadav, Samajwadi Part president
Whenever a scheme is launched for the poor, I fear it would never reach the real beneficiaries. – Sharad Yadav, JD(U) president
Criticism of the Food Security Bill
The critics of the food security bill term it as populist and fear that it will wreck the economy further. The proposed bill came at a time when the Reserve Bank of India published its Financial Stability Report, which categorically states that India’s inflation risk remains high and a slowdown in revenue collections and higher spending on subsidies may make it challenging for the government to achieve the fiscal deficit target of 4.6 per cent of the Gross Domestic Product (GDP) this financial year. The report also said that India’s trade deficit for this fiscal is expected to widen sharply to between $155 billion and $160 billion from a little above $104 billion a year ago.
Another criticism to the Food Security Bill is that it is against the federal structure of the country. Section 38 of the bill, argued Kalyan Banerjee (MP, AITMC), gives power to the Centre over the states, and must be removed.
Experts on economy say, both these deficits will only bloat immensely in due course, should the bill be passed and implemented. But, it is the trade deficit, which will soar manifold since the government will have to resort to large scale import of food grain as our own grain output is not adequate to handle such a voluminous expenditure programme.
The country produces 225-230 million tonnes of food grain every year barring a bumper crop year when the output surges by a few million tonnes more. Where will the rest come from, if not from overseas market! Economists opine it will increase food inflation.
WHY THE CHHATTISGARH MODEL IS APPRECIATED
During the Food Security Bill debate in the Lok Sabha, BJP leaders repeatedly compared the bill to the similar scheme in place in BJP-ruled Chhattisgarh, called Chhattisgarh Food Security Act, 2012. Let us look at the details:
- 90%, or about 50 lakh, families in the state covered by the scheme
- The Act considers the ability of a person to access subsidised food as a 'right', which means that if such food does not reach any place, officials and ration shop owners are answerable to law.
- Decentralised model of distribution: Preliminary identification of families and distribution of food grains through gram panchayats and gram sabhas.
- Besides food grains, essential items like gram, urad dal and salt also distributed.
- The responsibility to see that rules are followed likes with the panchayats and municipalities.
- Under the Antyodaya Anna Yojana, reserved categories, scheduled castes and scheduled tribes, adivasis, daily labourers and widows included for subsidised food.
- Special care is taken to provide proper calories and proteins through the free food given to children (Mid-Day Meal Scheme), pregnant women and postnatal mothers.
India is a land of the poor and destitute. It is but natural that the states' prerogative should be welfare of the masses. To that effect, the Food Security Bill should not just be a political poll gimmick, but should lay the foundation for a confident and stronger nation.